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Sprinkles from the Left

⏰🚀 Ready, Set, Go: These opinions take 1.71 minutes to read.

“Few among us want the Internal Revenue Service to conduct more audits. So what’s the best way for the IRS to shrink the tax gap — taxes owed but not paid? The key is better targeted audits, not just more of them. And the key to more effective audits is information…

A critical component of the [Biden] administration’s plan would enable the IRS to evaluate the amount of deposits and withdrawals flowing through bank accounts above a $10,000 threshold. This reporting is important for two reasons.

First, knowing that the IRS will have information that could highlight the underreporting of revenue on a tax return will make taxpayers more mindful of the perils of tax evasion and encourage honest reporting.

Second, knowing how much money flowed through an account will enable the IRS to better target which tax returns should be examined and possibly audited by comparing the cash coming into accounts with the amounts reported on returns. If there was a significant discrepancy the IRS would ask the taxpayer for more information…

People love to hate the IRS, but it’s in everyone’s interest for the IRS to be efficient and effective, which today it is not. The Biden plan to properly fund the IRS and close the tax gap is desperately needed. Shouldn’t we collect taxes that are owed before we raise new taxes on people who already pay what they owe?”

–Charles Ellis & Alexander Boyle, Bloomberg Opinion

“As part of a plan to rebuild the IRS after a decade of decline, President Biden has a sensible solution: require financial institutions to report additional information about taxpayers, which the IRS can then use to determine who might be evading taxes…

Reporting this data is so critical because it gives the IRS a heads up when a taxpayer’s true financial position — as reflected in aggregate account flows — differs from what was reported.

Third-party reporting… increases tax compliance from under 50% to over 95%. For the wealthiest taxpayers, income often falls outside of existing reporting streams. The single largest source of the tax gap is this low-visibility income, like royalties, capital gains, and certain types of business income, which disproportionately flows to the nation’s wealthiest. As much as about one-fifth to half of this income goes unreported, so gaining visibility is essential to closing that shortfall…

Better tax enforcement will advance the interests of honest taxpayers, who deserve to know others are paying what they owe, and honest business owners, who face unfair competition from tax cheats. That is why a bipartisan group of former secretaries of the Treasury, including me, endorse it.

Congress should embrace this important provision. Doing so will generate substantial revenue and create a more equitable tax system, where all people — not just ordinary American workers — pay what they owe.”

–Jacob J. Lew, former Treasury Secretary under President Obama

Sprinkles from the Right

⏰🚀 Ready, Set, Go: These opinions take 1.73 minutes to read.

“Many Americans reeled when they learned that the Internal Revenue Service plans to track bank accounts with yearly cash flow as small as $600. Legislators may now raise that number to $10,000, but don’t buy it—the effect of the policy would hardly change.

The controversy surrounds a provision Democrats have announced for their $5 trillion spending bill. The rule would require banks to report annual deposit and spending totals for ordinary account holders…

The Biden Administration hopes the records would reveal cases of suspiciously high spending and spur taxpayers to report income more accurately. But to achieve that goal they’re raking in data on every working American.

House Democrats heard the criticism and are eager for a whitewash… The White House has said it’s open to lifting the threshold to $10,000, and Senate Democrats will likely run with that number in the next version of the bill.

This is no cause for relief. Sure, $10,000 sounds less intrusive than $600, but the data dive would still apply to nearly every active checking account. A retiree collecting $1,200 a month in Social Security would clear the bar easily, as would a student splitting rent in a cheap city apartment. To catch the tax cheats, the IRS says it needs to check these folks’ spending figures, and yours too…

The Democrats are desperate for revenue to offset trillions in planned spending. But using the tax agency to screen and target ordinary Americans might be the least popular, and least effective, way they could do it.”

–WSJ Editorial Board

“President Biden likes to claim his $3.5 trillion tax and spending spree will only hurt the wealthiest Americans, leaving everyone else unscathed. As his plan comes into sharper focus, though, it’s become increasingly clear that Democrats intend to radically transform the lives of every worker, small business owner and family in America…

President Biden’s new plan creates a massive new dragnet that would sweep up all kinds of ordinary transactions that normal, law-abiding Americans make routinely. In effect, Washington liberals want to let the IRS leaf through Americans’ checking accounts as if everyone were a potential criminal or terrorist until proven otherwise…

If you believe you can trust the IRS to keep your personal information safe, think again. Just this year, an IRS leak exposed sensitive financial data from several Americans – information that was quickly weaponized by the political left… Americans simply can’t trust the federal government to hold their financial information in confidence…This vast expansion of government surveillance isn’t just unnecessary; it’s downright dangerous…

We cannot treat every American like a potential criminal. We cannot regulate community banks out of existence. We cannot make everyone’s sensitive financial information free game for hackers and partisan leakers.”

–Senate Minority Leader Mitch McConnell (R-KY)